AG answers question over how much EDC may spend

Q: There is disagreement among members of our EDC about how much they are allowed, as a quasi-governmental entity that serves at the pleasure of the city, to spend on promotional efforts this year, or any fiscal year, for that matter. Can you help me scrape up some authoritative information on this topic? By the way, our EDC is funded by a 4A half-cent sales tax.

A: Local Government Code Sec. 504105, Type A Corporations, Limitations on Use of Revenues for Promotional Purpose, deserves your attention. And there is an attorney general opinion that may save you some time. Back in 2003, then-Attorney General Greg Abbott’s staff produced Opinion No. GA-0086, answering “whether the Hutto Economic Development Corporation may pay for construction of a hippopotamus statue as a promotional purpose.” Your EDC may not be thinking about hippos or statues of other large mammals, but the opinion has a few bits of information that might be relevant and helpful nevertheless.

The summary of the opinion says the EDC “may not spend more than 10 percent of its current annual revenues for promotional purposes in any given year. In addition, unexpended revenues specifically set aside for promotional purposes in past years may be expended for such purposes.” It’s possible there are some unused funds from previous years that when added to this year’s proposed expenditure may give the impression that the EDC wishes to spent more than the 10 percent referenced above. Number crunching needs to happen.

Q: A local pastor seeks to place a help wanted ad in our classified section, and he’s adamant about the wording. He wants his ad crafted specifically to attract female applicants of a certain religious persuasion. I know about the Fair Housing Administration’s caution-word list, but is this different because it’s an employment ad?

A: The federal Equal Employment Opportunity Commission is the agency that addresses advertising-wording questions related to hiring. See Under the heading of Job Advertisements, you will read: “It is illegal for an employer to publish a job advertisement that shows a preference for or discourages someone from applying for a job because of his or her race, color, religion, sex (including pregnancy), national origin, age, disability or genetic information.” There have been legal challenges to this federal non-discrimination law, but as long as the First Amendment is part of the U.S. Constitution, no one can force you to publish anything against your will. Citizens who disagree with you are free to start their own newspapers and bear the risks of publishing.

Q: I get jabs now and then over how newspapers get a state sales tax exemption for subscriptions and single-copy sales. I need a fact or two to bring this into perspective. How much revenue does the state forego because of that newspaper sales tax exemption?

A: You’ll find that kind of information in the Texas Comptroller’s publication, Tax Exemptions & Tax Incidence: A Report to the Governor and the 83rd Texas Legislature, March 2013. See:

Table 2 of the publication states the value of sales tax exemptions, fiscal 2013 to 2018, in millions of dollars. Scroll down to Tax Code Sec. 151.319 in the left-hand column and you will find Newspapers and Property Used in Publications, listed at 8.6 in 2013, 8.3 in 2014, 8.1 in 2015, 7.8 in 2016, 7.6 in 2017 and 7.3 in 2018. The next line below, you’ll see similar figures for newspapers, which might well be the numbers you’re looking for. In the line after that, you’ll see newspaper inserts. Now, while you’re on Table 2, compare those newspaper figures to other industries’ tax exemption projections. 

Finally, check Table 1. You will readily discern that newspaper sales tax exemptions amount to a micro-thin slice of the value of sales tax exemptions, exclusions and discounts of all industries statewide. In 2013, that amount was nearly $36 billion, and newspaper exemptions amounted to $8 million. In 2014, the amount is projected at nearly $37 billion, and so on. To express the newspaper sales and use tax exemption total as a percentage of the whole for the year 2013, divide $8 million by $36 billion and you get 0.000222222. That is 22 ten-thousands of 1 percent.

Q: Some of our city council members are operating under the understanding they cannot discuss with me (or anyone) their closed session debates. Do you have any documentation that will help support my contention that they can (on permissible subjects) if they so desire? I’m coming up dry on the right language.

A: Share this landmark Texas attorney general opinion with them, Opinion No. JM-1071: